BEIJING, Feb. 18 /PRNewswire-Asia-FirstCall/ -- Lotus Pharmaceuticals, Inc.
(OTC Bulletin Board: LTUS, 'Lotus' or the 'Company'), a company that controls
and operates pharmaceutical companies in the People's Republic of China
('PRC'), today announced that contractually controlled Beijing Liang Fang
Pharmaceutical Co., Ltd. ('Liang Fang') entered into an intellectual rights
transfer contract with Beijing Yipuan Bio-Medical Technology Co., Ltd.
('Yipuan') in December 2008 to acquire the drug Yipubishan, a highly effective
and stable octreotide acetate injection solution, according to a clinical
research report issued by Beijing Union Medical College Hospital Center for
Clinical Pharmacology, used to treat the symptoms of gastric ulcers and
hemorrhages of the upper digestive tract since 2004.
Liang Fang will pay RMB54 million (about $7.9 million) in installments
within six months of the date of signing the intellectual rights transfer
contract with Yipuan (the intellectual property rights to Yipubishan are
documented in an official drug certificate for Yipubishan). Liang Fang has
paid RMB20 million (approximately $2.9 million) to Yipuan as of December 31,
2008 and the remaining balance of RMB34 million (approximately $5 million) is
due by May 31, 2009. Liang Fang intends to use its present working capital to
fund the project.
Part of the development costs of Yipubishan were funded through the use of
grants from the Innovation Fund for Small - Medium Technology Based Firms of
the Ministry of Science and Technology of the PRC. Because of its advanced
bio-medical technology and impact, Yipubishan became the first prescription
drug of its kind developed in China to be included in the National Torch
Project. The National Torch Project, approved by China State Department,
recognizes and promotes commercialization of high-tech discoveries and
encourages companies to use high technology.
Estimated third party revenue for Yipubishan in 2008 was RMB67 million
(about $9.8 million), with a 75.0% gross profit margin. Lotus is expecting to
have RMB75 million of revenue from Yipubishan in 2009 with a 75.0% gross
profit margin. After 2009, revenue from Yipubishan is expected to increase by
25% a year through 2011.
Yipuan has a manufacturing agreement with Beijing Si Huan pharmaceutical
Co., Ltd.
